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Peter Davis

An writer at FOMOdrive

  • Aug 04, 2023
  • 2 min read

The Ministry of Finance of the Russian Federation will bring down the ruble, resuming the purchase of foreign currency

The new budget rule will enable the Ministry of Finance to resume purchasing foreign currency.

It is anticipated that the budget's oil and gas revenues will go up in August as a result of the increasing oil prices.

The market will start selling foreign currency for the first time since the start of 2022.

On Thursday, the Ministry of Finance announced that the federal budget is projected to receive 73.2 billion rubles in additional oil and gas revenues by August 2023. This is a significant decrease from the expected monthly volume of such income, as the budget only received 32.7 billion rubles in July.

The total sum of 40.5 billion rubles has been allocated for the purchase of foreign currency and gold, and these operations will take place between August 7th, 2023 and September 6th, 2023.

The Ministry's message states that the equivalent of 1.8 billion rubles will be spent on daily purchases of foreign currency and gold, marking the first currency purchase under the fiscal rule since January 2022.

In 2022, after the imposition of Western sanctions, the fiscal rule was launched in a revised format. The Ministry of Finance, with the assistance of the Central Bank, is now purchasing yuan and gold from the National Wealth Fund (NWF).

After the price ceiling for Russian oil was broken in July, resulting in an increase in revenues for the Ministry of Finance, Brent rose to a price of $83-85 and Russian Urals rose to nearly $70, as reported by Otkritie Investments.

According to Arikacapital Management Company, should the Russian currency weaken significantly in the future, the Ministry of Finance may choose not to implement the budget rule.

It was reported on the eve of Vedomosti that the authorities would not purchase foreign currency for oil and gas super profits in the upcoming months, as a result of the ruble's depreciation.

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